7 Most Profitable Gaming Stocks To Invest In

2. NVIDIA Corporation (NASDAQ:NVDA)

TTM Net Income: $53.01 Billion

5-Year Net Income CAGR: 80.81%

Number of Hedge Fund Holders: 179

NVIDIA Corporation (NASDAQ:NVDA) is a prominent American technology company that is also known for its role in the gaming industry, particularly through its powerful graphics processing units (GPUs). Since inventing the GPU in 1999, NVIDIA has transformed computer graphics and fueled the growth of PC gaming. The company’s GeForce line of GPUs is particularly popular among gamers, providing high-performance graphics for an immersive gaming experience.

Additionally, the company offers GeForce NOW, a cloud-based gaming service that allows players to stream games directly from the cloud to various devices, including laptops, desktops, and smartphones. This service enables gamers to access their game libraries on any supported device, making gaming more accessible and convenient.

NVIDIA Corporation (NASDAQ:NVDA) is playing a significant role in the booming artificial intelligence (AI) market. The company has seen massive growth in revenue, especially from its data center business, which has now become its primary source of income, surpassing the gaming segment that used to be the biggest. Despite this shift, NVIDIA remains one of the largest companies in the gaming industry.

The company is focusing on innovative strategies to strengthen its position in the gaming market. In the second quarter of fiscal 2025, NVIDIA Corporation (NASDAQ:NVDA) reported gaming revenue of $2.9 billion, reflecting a 9% increase from the previous quarter and a 16% rise from the same period last year. NVIDIA has introduced several exciting technologies, such as NVIDIA ACE, which uses generative AI to create lifelike digital characters and enhance player interactions. This technology allows game developers to build intelligent digital characters that can engage in realistic conversations, significantly improving the gaming experience.

Moreover, NVIDIA’s GeForce NOW service has surpassed 2,000 games and expanded into new markets like Japan. The launch of popular titles and partnerships with developers to integrate AI features further solidifies the company’s role in shaping the future of gaming. With these advancements and a strong revenue growth trajectory, NVIDIA Corporation (NASDAQ:NVDA) is well-positioned to capitalize on the growing demand for innovative gaming experiences.

NVIDIA Corporation (NASDAQ:NVDA) has managed to grow its top line at a compound annual growth rate (CAGR) of 56.73% over the past five years, while its bottom line has increased at a CAGR of 80.81% during the same period. Over the past 5 years, the company has also grown its levered free cash flow at a CAGR of 84.47%.

According to Insider Monkey’s database, 179 hedge funds held stakes in NVIDIA Corporation (NASDAQ:NVDA) in the second quarter of 2024. This brings NVDA to the 2nd spot on our list of the most profitable gaming stocks to invest in.